Affordable Housing Research Report

Affordable Housing Research Report


Written By Susan Moritz, Research Consultant

Land Use Law Center


“Fully one in three American households now spends more than 30 percent of income on housing, and one in seven spends more than 50 percent.  The growing shortage of affordable units forces millions of families to make difficult choices to pay for housing—sacrifice other basic needs, make long commutes, and/or live in crowded or inadequate conditions.” Harvard Joint Center for Housing Studies, The State of the Nation’s Housing 2006 (June 2006).

Nationally, the lack of affordable housing affects not only low-income workers but senior citizens, middle-income families, municipal employees, volunteer firemen, farm workers, young families, women and single-parent households, apartment renters, and first-time homebuyers—groups that are important to community life but that may be unable to afford market-rate housing.  Businesses that require skilled workers and a stable workforce suffer when workers cannot afford to live where they work.  Communities suffer when teachers, police and fire personnel, local government workers, elderly residents, and young families cannot afford housing.

“The millions of low-wage jobs that the economy creates do not provide enough income to enable workers to afford even the most modest housing.  Without fundamental changes, these challenges will continue to escalate, further dividing the two-thirds of Americans who are well housed and the remaining third who are not.” Harvard Joint Center for Housing Studies Housing Review (Fall 2004).

The U.S. Census Bureau defines housing that costs more than 30% of income as a burden. According to the U.S. Department of Housing and Urban Development (HUD), in the first quarter of 2006 housing affordability “worsened significantly from the first quarter of 2005.” Compared with the first quarter of 2005, there was “a 10.3-percent increase in the median house price and a 63-basis-point increase in the mortgage interest rate.”  In the second quarter of 2006, “[h]ousing affordability declined from the first quarter of 2006 and from the second quarter of 2005 …” HUD reports that in the second quarter of 2006 the national median price of a new home was $241,100; the median price of an existing home was $227,300.  The decline in housing affordability “from the second quarter of 2005 resulted from a 4-percent increase in the median house price and an 80-basis-point increase in the mortgage interest rate …”

HUD , U.S. Housing Market Conditions Summary 1st Quarter 2006 (May 2006),; U.S. Housing Market Conditions Summary 2nd  Quarter 2006 (August 2006),

“Between 2001 and 2004, the number of households spending more than half their income on housing increased by 2 million—up 14 percent—to 15.8 million.” Harvard Joint Center for Housing Studies, The State of the Nation’s Housing 2006 (June 2006).

Analyzing data compiled by HUD and the National Association of Realtors, the National Low Income Housing Corporation (NLIHC) reports that in the United States a worker must earn $15.78 an hour to afford to rent a market-rate two-bedroom apartment. In New York State , a worker must earn $19.73 an hour. In Westchester County , the figure is $25.31 an hour. At minimum wage, a renter in Westchester must work 169 hours a week to afford a two-bedroom apartment. New York is the fifth least affordable state in the nation. NLIHC, Out of Reach 2005:

According to a 2003 study by the AFL-CIO, one third of all households in New York ’s Hudson River Valley paid at least 30% of their income for housing.  The study found that 28% of Hudson Valley households cannot afford their county’s median gross rent for an apartment; 34% cannot afford their county’s fair market rent for a two-bedroom apartment; 54% cannot afford their county’s median monthly cost of owning a mortgaged home; 18% cannot afford their county’s median monthly cost of owning an unmortgaged home; 78% could not qualify for a conventional 90% mortgage on a median-priced home in their county.  AFL-CIO, The Crisis of Affordable Housing for the Hudson Valley’s Working People:

“[F]inding affordable housing in Westchester can be problematic even for households earning close to the county median in income.” Westchester County Affordable Housing Needs Assessment ( March 30, 2004 ).

In a study of Westchester County’s housing needs for the years 2000-2015, based on the 2000 census, the county estimated that of the total of 335,244 households in the county, 153,337 households are “income constrained” in finding affordable housing.  The study notes that “[m]ost families who have lived in Westchester for more than 15 years would not be able to afford to purchase their own home today.” Westchester County Affordable Housing Needs Assessment ( March 30, 2004 ):

“Some of the tradeoffs working families make when they pay half their income for housing entail real hardships, especially for the most vulnerable working families.  These working families are 23 percent more likely than those paying less for housing to encounter difficulties purchasing food. They are also 28 percent more likely to have either a child or an adult lack health insurance …” Center for Housing Policy, National Housing Conference, Something’s Gotta Give: Working Families and the Cost of Housing (2005).


“While explanations vary, evidence is mounting that the two principal forces behind housing affordability problems are restrictions on residential development and growth in low-wage and part-time employment. Local land use regulations that limit lot size and density have helped to drive up housing prices and rents relative to incomes.” Harvard Joint Center for Housing Studies, The State of the Nation’s Housing 2006 (June 2006).

Housing costs have increased much faster than family income.  Housing values have risen to the point where many homeowners’ greatest asset is their home, and many homeowners—in a NIMBY reaction—are unwilling to risk any perceived depreciation of their home’s value by having affordable housing nearby.  Rental units have been converted to condominiums and cooperatives or single-family homes.  Gentrification has caused housing prices to rise in older neighborhoods.  Land values have risen.

In 2004 the National Association of Counties asked county governments across the country to identify the greatest barriers to affordable housing for working families in their jurisdictions. NIMBY-ism was listed as the greatest barrier by 75% of the respondents. Next was lack of public funding, followed by lack of private sector interest; lack of available land; and zoning restrictions and other land use regulations. National Association of Counties, Paycheck to Paycheck: Wages and the Cost of Housing in the Counties (2004):

The NLIHC reports that “more than 80% of all renter households live in jurisdictions where the minimum wage is less than half” of the hourly wage needed to afford a two-bedroom rental at fair market rates while spending no more than 30 percent of income on housing and working 40 hours a week 52 weeks a year. Even the national mean renter wage—estimated at $12.22 an hour—“is sufficient to make a two-bedroom unit affordable in only 41 metropolitan areas nationwide, containing only 14% of all renter households.” NLIHC, Out of Reach 2005:


Federal Programs

“The federal government’s high water mark for housing assistance was in the mid-1970s and funding has not come near that level in the years since.  Nor will it in the next five years, absent a major policy and funding shift.”  National Low Income Housing Coalition Changing Priorities (October, 2004).

Meeting Our Housing Challenges, the 2002 report of the bipartisan Millennial Housing Commission summarizes the array of federal housing assistance and tax benefit programs in a lengthy appendix: A report by the National Low Income Housing Coalition on the federal budget and housing assistance notes that assistance for the lowest-income people has declined sharply since 2001.  Although HUD programs tend to favor homeownership, and more than 70% of homebuyers under HUD’s HOME program have incomes from 50% to 80% of the area median, homeowners have also suffered: “[T]he looming federal deficit and focus on tax cuts are not only starving low-income housing, but a range of federal programs, particularly those benefiting low and middle income families.” NLIHC, Changing Priorities (2004): HUD is currently committed to “the removal of burdensome regulatory barriers” to affordable housing.  HUD’s Regulatory Barriers Clearinghouse offers links to case studies of community “solutions that support affordable housing”: HUD’s FY 2007 Budget Summary is available at: A chart showing enacted HUD budget figures for FY04-FY06 and requested figures for FY07 for a number of housing programs is available at:

State Programs

“‘Experience across the nation shows that only where the state government has assumed a leadership role in coping with housing problems has significant progress been made.”  Anthony Downs, Brookings Institution (December, 2004).

The National Governors Association (NGA) Center for Best Practices has issued a report that surveys successful state affordable housing programs across the nation and recommends six policies at the state level:  

  • Coordinating Programs and Resources to Support Affordable Housing

  • Linking Housing and Development Policies

  • Promoting Development of Older Neighborhoods

  • Reducing Regulatory Costs of Housing Development

  • Implementing Zoning Reform to Promote Affordable Housing

  • Partnering with Stakeholders to Promote Housing Initiatives.

The NGA report stresses that regional agencies and governors themselves “are in a unique position to improve housing.  With a broad view of issues and stakeholders, many of the tools to help solve housing affordability challenges are well within reach.  Identifying needs, building coalitions, developing new strategies, and making links between related housing and development issues can have significant impact.”  National Governors Association, Integrating Affordable Housing with State Development Policy,

Anthony Downs, in a recent paper presented to a national planning conference, also emphasized the important role that governors can play in developing affordable housing, and proposed a series of steps that state governments could take to influence local governments, including setting general housing goals; setting out specific planning procedures for local comprehensive plans; providing for a three-year review of local plans and regulations by a state or regional agency; and establishing affordable housing targets and significant financial incentives for developing approved plans.  Anthony Downs, Trying to Remove Regulatory Barriers to Affordable Housing (December, 2004).

New Jersey , Connecticut , Illinois , and Maryland are among states that have supported affordable housing through a combination of legislation and incentives.  Anti-NIMBY legislation in California , New Jersey , Massachusetts , and Oregon is discussed in HUD’s Regulatory Barriers Clearinghouse newsletter for September 2006, available at:

Local Programs

“Smart Growth cannot be really socially just and responsible unless it includes a significant element of affordable housing.  That would make it truly smart.”  Anthony Downs, Brookings Institution (2003).

Both sprawling development and smart growth policies to prevent sprawl have been blamed for the increasing lack of affordable housing.  But growth management advocates have demonstrated that smart growth techniques such as comprehensive planning, growth districts, incentive zoning, infill development, cluster subdivision, historic district preservation, and transfer of development rights—techniques that can be adopted by local governments on their own initiative—can promote the creation of affordable housing and combat exclusionary zoning. 

The Fannie Mae Foundation reports that since 2000 Boston, Denver, Sacramento, San Diego, and San Francisco have adopted mandatory inclusionary housing provisions for certain developments: Housing Facts and Findings, Volume 8 Issue 1 2006,

In New York , an increasing number of local governments have adopted workforce and affordable housing policies and ordinances, particularly in the counties surrounding New York City , where population and housing pressures are greatest. The Town of Southold, on Long Island, for example, adopted an ordinance in September 2004 creating an affordable housing fund as “a mechanism to obtain funding and create programs that will increase housing opportunities” for residents and employees of the town who cannot afford market-rate housing. Code of Town of Southold , NY Chapter 98.

In 2004, the Town of Fishkill , in Dutchess County , adopted an Affordable Housing ordinance “to provide guidelines, regulations and incentives for the development of moderately priced dwelling units for persons of low or moderate income levels.” The ordinance includes development standards, eligibility criteria, and calculations of initial sales price and rent, and establishes an Affordable Housing Trust Fund to defray administrative and infrastructure costs. Code of the Town of Fishkill , N.Y. Chapter 150 Article IXB.

Westchester County has cooperated with 25 local governments in developing a range of workforce and affordable housing projects. The Housing Action Council describes affordable housing projects in the county at:

The county maintains a photo gallery of housing projects at:

“In recent years, housing prices have risen dramatically in Westchester County .  This has put affordable home and rental units out of reach for more and more individuals and families.  The median price of a home in Westchester was $655,000 in January of this year, a 13.5% increase since 2004.”   Memo, Assembly Bill A10344, to create the Westchester County workforce housing incentive program; passed by the New York State Assembly and delivered to the Senate on June 20, 2006.

“On Long Island , more than 25% of households—and one-third of renters—pay more than 35% of their gross monthly income on their rent or mortgage.  In fact … ratios of gross rent-to-income that exceed 50% are commonplace.  Unless Long Island can expand its stock of affordable workforce housing, employers will face perpetual labor shortages and the region could face constricted economic growth.”  Memo, Assembly Bill A02050, to create the Long Island workforce housing incentive program; passed by the New York State Assembly and delivered to the Senate on January 30, 2006.  These bills and other pending New York legislation on workforce housing are available at the Assembly web site,